There's no problem with returning capital to shareholders. There is a problem when shareholders just plow it back into index funds. Does Apple have a better use of money than shareholders? Well, there are investments available to Apple that aren't even available to shareholders, so on the face of it, how could they not?
Therefore the issue isn't so much Apple not being able to find better opportunities than shareholders, but that it can't find better opportunities than Apple -- making those actually good investments would look bad for Apple because of how absurdly profitable it is. That's not a good reason to return capital, if you think about it carefully.
Therefore the issue isn't so much Apple not being able to find better opportunities than shareholders, but that it can't find better opportunities than Apple -- making those actually good investments would look bad for Apple because of how absurdly profitable it is. That's not a good reason to return capital, if you think about it carefully.